10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 0-30907

iGo, Inc.

(Exact name of registrant as specified in its charter)

Delaware	86-0843914
(State or Other Jurisdiction of Incorporation or	(IRS Employer Identification No.)
Organization)
17800 N. Perimeter Dr., Suite 200, Scottsdale, Arizona	85255
(Address of Principal Executive Offices)	(Zip Code)

(480) 596-0061
(Registrant’s telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES þ                     NO o

Indicate by a checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES þ                     NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer o	Non-Accelerated Filer o	Smaller Reporting Company þ
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o                     NO þ

At August 2, 2011, there were 33,433,759 shares of the Registrant’s Common Stock, par value $0.01 per share outstanding.

IGO, INC.
FORM 10-Q

TABLE OF CONTENTS

	PAGE NO.
PART I FINANCIAL INFORMATION		1
Item 1. Financial Statements:		1
Condensed Consolidated Balance Sheets		1
Condensed Consolidated Statements of Operations		2
Condensed Consolidated Statements of Cash Flows		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3. Quantitative and Qualitative Disclosures About Market Risk		21
Item 4. Controls and Procedures		21
PART II OTHER INFORMATION		22
Item 1. Legal Proceedings		22
Item 1A. Risk Factors		22
Item 6. Exhibits		22
SIGNATURES		23
EXHIBIT INDEX		24
Items 2, 3, 4 and 5 are not applicable.
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

i

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS:

IGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(unaudited)

	June 30,			December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	6,974		$	9,942
Short-term investments		9,020			14,532
Accounts receivable, net		7,126			8,620
Inventories		14,283			10,307
Prepaid expenses and other current assets		828			460
Total current assets		38,231			43,861
Property and equipment, net		625			654
Goodwill		1,970			1,905
Intangible assets, net		4,154			3,594
Long-term investments		1,314			—
Other assets		159			159
Total assets	$	46,453		$	50,173
LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	5,221		$	4,666
Accrued expenses and other current liabilities		1,051			1,371
Deferred revenue		706			1,838
Total liabilities		6,978			7,875
Equity:
Common stock, $.01 par value; authorized 90,000,000 shares; 33,430,781 and 32,893,892 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively		334			329
Additional paid-in capital		172,733			172,241
Accumulated deficit		(133,959	)		(130,381	)
Accumulated other comprehensive income		367			109
Total equity		39,475			42,298
Total liabilities and equity	$	46,453		$	50,173

See accompanying notes to unaudited condensed consolidated financial statements.

1

IGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Revenue	$	10,831		$	9,748		$	20,059		$	17,916
Cost of revenue		8,031			6,436			14,400			11,953
Gross profit		2,800			3,312			5,659			5,963
Operating expenses:
Sales and marketing		2,165			1,634			4,202			3,405
Research and development		606			390			1,077			709
General and administrative		2,039			1,785			4,080			3,422
Total operating expenses		4,810			3,809			9,359			7,536
Loss from operations		(2,010	)		(497	)		(3,700	)		(1,573	)
Other income, net:
Interest income, net		21			40			42			96
Gain on disposal of assets and other income, net		50			57			80			1,846
Net income (loss)		(1,939	)		(400	)		(3,578	)		369
Net income (loss) per share
Basic	$	(0.06	)	$	(0.01	)	$	(0.11	)	$	0.01
Diluted	$	(0.06	)	$	(0.01	)	$	(0.11	)	$	0.01
Weighted average common shares outstanding
Basic		33,315			32,750			33,170			32,654
Diluted		33,315			32,750			33,170			33,965

See accompanying notes to unaudited condensed consolidated financial statements.

2

IGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Six Months Ended
	June 30,
	2011			2010
Cash flows from operating activities:
Net income (loss)	$	(3,578	)	$	369
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Provision for doubtful accounts and sales returns and credits		426			124
Depreciation and amortization		900			740
Amortization of deferred compensation		986			618
Gain on sale of business		—			(1,714	)
Changes in operating assets and liabilities:
Accounts receivable		1,069			(75	)
Inventories		(3,976	)		(255	)
Prepaid expenses and other assets		(974	)		(244	)
Accounts payable		555			1,486
Accrued expenses and other current liabilities		(1,940	)		709
Net cash (used in) provided by operating activities		(6,532	)		1,758
Cash flows from investing activities:
Purchase of property and equipment		(184	)		(149	)
Purchase of intangibles		(706	)		—
Sale (purchase) of short-term investments, net		5,503			(7,159	)
Purchase of long-term investments		(1,226	)		—
Net cash provided by (used in) investing activities		3,387			(7,308	)
Cash flows from financing activities:
Net cash provided by financing activities		—			—
Effects of exchange rate changes on cash and cash equivalents		177			(116	)
Net decrease in cash and cash equivalents		(2,968	)		(5,666	)
Cash and cash equivalents, beginning of period		9,942			19,775
Cash and cash equivalents, end of period	$	6,974		$	14,109

See accompanying notes to unaudited condensed consolidated financial statements.

3

IGO, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(1) Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of iGo, Inc. and its wholly-owned subsidiaries, Mobility California, Inc., Mobility Idaho, Inc., iGo EMEA Limited, Mobility Texas, Inc., iGo Direct Corporation, Adapt Mobile Limited (“Adapt”) and Aerial7 Industries, Inc. (“Aerial7”) (collectively, “iGo” or the “Company”). All significant intercompany balances and transactions have been eliminated in the accompanying condensed consolidated financial statements.

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles, pursuant to rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying condensed consolidated financial statements include normal recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2010 included in the Company’s Form 10-K, filed with the SEC. The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of results to be expected for the full year or any other period.

The preparation of the condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make a number of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to bad debts, sales returns and price protection, inventories, warranty obligations, and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued amended guidance on the presentation of comprehensive income. The amended guidance eliminates one of the presentation options provided by current U.S. GAAP, that is to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, it gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance will be effective for reporting periods beginning after December 15, 2011 and will be applied retrospectively. The Company is in the process of evaluating the disclosure impact of this guidance.

In May 2011, the FASB issued amended guidance on fair value measurement and related disclosures. The new guidance clarified the concepts applicable for fair value measurement of non-financial assets and requires the disclosure of quantitative information about the unobservable inputs used in a fair value measurement. This guidance will be effective for reporting periods beginning after December 15, 2011, and will be applied prospectively. The Company is in the process of evaluating the financial and disclosure impact of this guidance, and does not anticipate a material impact on its consolidated financial statements as a result of the adoption of this amended guidance.

In December 2010, the FASB issued an update to the existing guidance for goodwill and other intangible assets. The update modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if there are qualitative factors indicating that it is more likely than not that a goodwill impairment exists. The qualitative factors are consistent with the existing guidance which requires goodwill of a reporting unit to be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010, which for the Company is calendar year 2011. The adoption of this guidance did not have a material impact on the Company’s financial condition, results of operations or cash flows for the six months ended June 30, 2011.

4

In November 2010, the FASB issued an update to its existing guidance on business combinations. This guidance requires a public entity that presents comparative financial statements to present in its pro forma disclosure the revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the prior annual reporting period. In addition, this guidance expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after December 15, 2010, which for the Company is calendar year 2011. The guidance did not have an impact on the Company’s disclosures for the six months ended June 30, 2011.

Other accounting standards and exposure drafts, such as exposure drafts related to revenue recognition, leases, financial instruments, and fair value measurements, that have been issued or proposed by the FASB or other standards setting bodies that do not require adoption until a future date are being evaluated by the Company to determine whether adoption will have a material impact on the Company’s consolidated financial statements.

(2) Fair Value Measurement

As of June 30, 2011, the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis are comprised of overnight money market funds and investments in marketable securities.

The Company invests excess cash from its operating cash accounts in overnight money market funds and reflects these amounts within cash and cash equivalents on the condensed consolidated balance sheet at a net value of 1:1 for each dollar invested.

At June 30, 2011 and December 31, 2010, investments in marketable securities totaling $9,020,000 and $14,532,000, respectively, are classified as short-term investments on the condensed consolidated balance sheets. These investments are considered available-for-sale securities and are reported at fair value based on third-party broker statements, which qualifies as level 2 in the fair value hierarchy. At June 30, 2011, investments in marketable securities totaling $1,314,000 are classified as long-term investments on the condensed consolidated balance sheet. These investments are considered available-for-sale securities and are reported at fair value based on a quoted market price, which qualifies as level 1 in the fair value hierarchy. The unrealized gains and losses on available-for-sale securities are recorded in accumulated other comprehensive income. Realized gains and losses are included in interest income, net.

(3) Investments

Short-term

The Company has determined that all of its investments in short-term marketable securities should be classified as available-for-sale and reported at fair value.

The Company assesses its investments in marketable securities for other-than-temporary declines in value by considering various factors that include, among other things, any events that may affect the creditworthiness of a security’s issuer, the length of time the security has been in a loss position, and the Company’s ability and intent to hold the security until a forecasted recovery of fair value.

The Company generated net proceeds of $5,503,000 from the sale of available-for-sale marketable securities during the six months ended June 30, 2011 and, and used $7,159,000 to purchase available-for-sale marketable securities during the six months ended June 30, 2010.

5

As of June 30, 2011 and December 31, 2010, the amortized cost basis, unrealized holding gains, unrealized holding losses, and aggregate fair value by short-term major security-type investments were as follows (dollars in thousands):

	June 30, 2011							December 31, 2010
			Net							Net
			Unrealized							Unrealized
			Holding							Holding
	Amortized		Gains			Aggregate		Amortized		Gains		Aggregate
	Cost		(Losses)			Fair Value		Cost		(Losses)		Fair Value
U.S. corporate securities:
Commercial paper	$	1,998	$	—		$	1,998	$	1,100	$	—	$	1,100
Corporate notes and bonds		4,225		(4	)		4,221		4,519		4		4,523
		6,223		(4	)		6,219		5,619		4		5,623
U.S. municipal funds		2,088		8			2,096		2,071		3		2,074
U.S. government securities		705		—			705		6,833		2		6,835
	$	9,016	$	4		$	9,020	$	14,523	$	9	$	14,532

Long-term

In June 2011, the Company made an investment in Pure Energy Visions Corporation, which is a shareholder in Pure Energy Solutions, the Company’s supplier of rechargeable batteries, in which the Company received 2,142,858 shares of Pure Energy Visions common stock at a price per share equal to $0.286, and an interest-free convertible secured debenture having a one-year repayment term that converts into an additional 2,142,858 shares of Pure Energy Visions common stock in lieu of repayment either upon the achievement of certain business goals or earlier at iGo’s discretion. The Company did not obtain control of Pure Energy Visions as a result of this investment.

As of June 30, 2011 and December 31, 2010, the amortized cost basis, unrealized holding gains, unrealized holding losses, and aggregate fair value by long-term major security-type investments were as follows (dollars in thousands):

	June 30, 2011						December 31, 2010
			Net						Net
			Unrealized						Unrealized
	Amortized		Holding		Aggregate		Amortized		Holding		Aggregate
	Cost		Gains		Fair Value		Cost		Gains		Fair Value
Canadian corporate securities:
Common stock	$	613	$	44	$	657	$	—	$	—	$	—
Corporate debenture		613		44		657		—		—		—
	$	1,226	$	88	$	1,314	$	—	$	—	$	—

(4) Goodwill

Goodwill is as follows (dollars in thousands):

Reported balance at December 31, 2010	$	1,905
Adjustment to Adapt		58
Adjustment to Aerial7		7
Reported balance at June 30, 2011	$	1,970

During the six months ended June 30, 2011, the Company recorded revised estimates of fair value for certain acquired assets and liabilities assumed related to the acquisitions of Adapt and Aerial7 resulting in a net increase to goodwill of $65,000. The Company anticipates the finalization of asset valuations and other post-close adjustments will be completed during the third and fourth quarters of 2011 for Adapt and Aerial7, respectively.

6

(5) Intangible Assets

Intangible assets consist of the following at June 30, 2011 and December 31, 2010 (dollars in thousands):

			June 30, 2011							December 31, 2010
	Average		Gross					Net		Gross					Net
	Life		Intangible		Accumulated			Intangible		Intangible		Accumulated			Intangible
	(Years)		Assets		Amortization			Assets		Assets		Amortization			Assets
Amortized intangible assets:
Patents and trademarks		3	$	5,117	$	(4,211	)	$	906	$	4,576	$	(3,885	)	$	691
Non-compete agreements		3		170		(49	)		121		170		(19	)		151
Trade names		8		652		(433	)		219		652		(375	)		277
Customer intangibles		5		1,552		(256	)		1,296		1,550		(102	)		1,448
Distribution rights		5		375		(32	)		343		—		—			—
Proprietary process		5		850		(129	)		721		850		(43	)		807
Technology license		10		331		(3	)		328		—		—			—
Total amortizable				9,047		(5,113	)		3,934		7,798		(4,424	)		3,374
Non-amortized intangible assets:
In process research and development				220		—			220		220		—			220
Total intangible assets			$	9,267	$	(5,113	)	$	4,154	$	8,018	$	(4,424	)	$	3,594

Aggregate amortization expense for identifiable intangible assets totaled $310,000 and $689,000 for the three and six months ended June 30, 2011. Aggregate amortization expense for identifiable intangible assets totaled $240,000 and $470,000 for the three and six months ended June 30, 2010.

In February 2011, the Company entered into a marketing, distribution and licensing agreement with PureEnergy Solutions, a manufacturer of rechargeable alkaline batteries. The Company also simultaneously entered into an agreement with Premier Tech Home & Garden to take over its current distribution rights for PureEnergy batteries in Canada. The corresponding value of these distribution rights are reflected in the table above under the caption “Distribution rights.”

In June 2011, the Company made an investment in Pure Energy Visions Corporation, which is a shareholder in Pure Energy Solutions, in which the Company received a license to utilize rechargeable alkaline battery technology. The corresponding value of this license is reflected in the table above under the caption “Technology license.”

(6) Stock-based Compensation

In May 2011, the Company’s stockholders approved an amendment to the Omnibus Long-Term Incentive Plan (the “Omnibus Plan”) to increase the number of shares available for grant by 3,000,000, from 2,350,000 to 5,350,000. The Omnibus Plan was also amended to extend its term to March 11, 2024.

Stock-based compensation expense includes compensation expense, recognized over the applicable requisite service periods for share-based awards. As of June 30, 2011, there were no fully-vested outstanding stock options and no non-vested outstanding stock options. Accordingly, there was no unrecognized compensation expense relating to non-vested stock options at June 30, 2011.

The following table summarizes information regarding restricted stock units for the six months ended June 30, 2011:

	2004 Directors Plan					Omnibus Plan					Inducement Grants
				Weighted					Weighted					Weighted
				Average					Average					Average
				Value per					Value per					Value per
	Number			Share		Number			Share		Number			Share
Outstanding, December 31, 2010		72,276		$	1.42		808,229		$	1.90		1,425,000		$	1.91
Granted		—			—		690,250		$	3.00		—			—
Canceled		—			—		(7,500	)	$	2.82		—			—
Released to common stock		(72,276	)		1.42		(296,435	)	$	2.14		(171,126	)		2.13
Released for settlement of taxes		—			—		(109,932	)	$	2.22		(78,874	)		2.13
Outstanding, June 30, 2011		—		$	—		1,084,612		$	2.50		1,175,000		$	1.87

For the three and six months ended June 30, 2011, the Company recorded in general and administrative expense pre-tax charges of $564,000 and $986,000, respectively, associated with the expensing of restricted stock unit (“RSU”) awards activity. For the three and six months ended June 30, 2010, the Company recorded in general and administrative expense pre-tax charges of $351,000 and $618,000, respectively, associated with the expensing of restricted stock unit awards activity

7

As of June 30, 2011, there was $3,933,000 of total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of two years.

As of June 30, 2011, all outstanding restricted stock units were non-vested.

(7) Gain on Disposal of Assets and Other Income, net

On April 19, 2010, the Company entered into a transaction with Mission Technology Group (“Mission”) that resulted in complete collection of the remaining unpaid principal balance of $1,700,000 of its note receivable and the sale of its 15% common equity interest in Mission. As the Company had previously recorded a valuation allowance of $1,714,000 against the promissory note, the Company determined that as of March 31, 2010, based on the subsequent collection of $1,700,000 as payment-in-full against the note receivable, collectability of the note was reasonably assured. Accordingly, the Company reversed its valuation allowance against the note receivable and recorded a gain of $1,714,000 during the three months ended March 31, 2010.

(8) Net Income (Loss) per Share

The computation of basic and diluted net income (loss) per share follows (in thousands, except per share amounts):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Basic net income (loss) per share computation:
Numerator:
Net income (loss)	$	(1,939	)	$	(400	)	$	(3,578	)	$	369
Denominator:
Weighted average number of common shares outstanding		33,315			32,750			33,170			32,654
Basic net income (loss) per share:	$	(0.06	)	$	(0.01	)	$	(0.11	)	$	0.01
Diluted net income (loss) per share computation:
Numerator:
Net income (loss)	$	(1,939	)	$	(400	)	$	(3,578	)	$	369
Denominator:
Weighted average number of common shares outstanding		33,315			32,750			33,170			32,654
Effect of dilutive stock options, warrants, and restricted stock units		—			—			—			1,311
		33,315			32,750			33,170			33,695
Diluted net income (loss) per share:	$	(0.06	)	$	(0.01	)	$	(0.11	)	$	0.01
Stock options not included in dilutive loss per share since anti-dilutive		—			15			—			15
Warrants not included in dilutive loss per share since anti-dilutive		5			5			5			5

(9) Comprehensive Income (Loss)

Comprehensive income (loss) for the three and six months ended June 30, 2011 and 2010 includes the following components (dollars in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net income (loss)	$	(1,939	)	$	(400	)	$	(3,578	)	$	369
Other comprehensive income:
Unrealized gain (loss) on available for sale investments		81			14			79			(3	)
Foreign currency translation adjustments		45			(66	)		179			(116	)
Total comprehensive income (loss)		(1,813	)		(452	)		(3,320	)		250

8

(10) Product Lines, Concentration of Credit Risk and Significant Customers

The Company is engaged in the business of selling accessories for computers and mobile electronic devices. The Company has five product lines, consisting of Power, Batteries, Audio, Protection and Other Accessories. The Company’s chief operating decision maker (“CODM”) continues to evaluate revenues and gross profits based on product lines and geographies.

The following tables summarize the Company’s revenues by product line, as well as its revenues by geography (dollars in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Power	$	9,162	$	9,573	$	17,071	$	17,594
Batteries		291		—		437		—
Audio		837		—		1,609		—
Protection		338		—		487		—
Other accessories		203		175		455		322
Total revenues	$	10,831	$	9,748	$	20,059	$	17,916

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
North America (principally United States)	$	7,923	$	8,385	$	14,758	$	14,724
Europe		2,328		867		4,208		2,162
Asia Pacific		580		496		1,093		1,030
	$	10,831	$	9,748	$	20,059	$	17,916

The majority of the Company’s assets are domiciled in the United States.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high credit quality financial institutions and generally limits the amount of credit exposure to the amount of FDIC coverage. However, periodically during the year, the Company maintains cash in financial institutions in excess of the current FDIC insurance coverage limit of $250,000. The Company performs ongoing credit evaluations of its customers’ financial condition but does not typically require collateral to support customer receivables. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

Two customers accounted for 23% and 10% of net sales for the six months ended June 30, 2011. Two customers accounted for 39% and 13% of net sales for the six months ended June 30, 2010.

Two customer’s accounts receivable balance accounted for 22% and 16% of net accounts receivable at June 30, 2011. Two customers’ accounts receivable balances accounted for 33% and 21% of net accounts receivable at June 30, 2010.

Allowance for doubtful accounts was $129,000 and $131,000 at June 30, 2011 and December 31, 2010, respectively. Allowance for sales returns and price protection was $296,000 and $419,000 at June 30, 2011 and December 31, 2010, respectively.

(11) Contingencies

The Company procures its products primarily from supply sources based in Asia. Typically, the Company places purchase orders for completed products and takes ownership of the finished inventory upon completion and delivery from its supplier. Occasionally, the Company presents its suppliers with ‘Letters of Authorization’ for the suppliers to procure long-lead raw components to be used in the manufacture of the Company’s products. These Letters of Authorization indicate the Company’s commitment to utilize the long-lead raw components in production. As of June 30, 2007, based on a change in strategic direction, the Company determined it would not procure certain products for which it had outstanding Letters of Authorization with suppliers. The Company believes it is probable that it will be required to pay suppliers for certain Letter of Authorization commitments and has already partially settled some of these obligations. At June 30, 2011 and December 31, 2010, the Company had estimated, and recorded, a remaining liability for this contingency in the amount of $175,000 and $160,000, respectively.

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From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business. The Company is not currently a party to any litigation that the Company believes, if determined adversely to it, would have a material adverse effect on its financial condition, results of operations, or cash flows.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe,” “expect,” “anticipate,” “estimate” and other similar statements of expectations identify forward-looking statements. Forward-looking statements in this report can be found in the “Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections as well as other sections of this report and include, without limitation, statements concerning our expectations regarding our anticipated revenue, cash flows, gross profit, gross margins, operating and related expenses and trends for 2011 in key operating metrics, including days outstanding in accounts receivable and inventory turns; our expectation that we expect our overall 2011 revenue to approximate our 2010 revenue; the benefits of our RAMcell batteries; our ability to utilize our net operating loss carryforwards; that sales to Belkin will decline in the future; the timing of our finalization of asset valuations relating to the Adapt and Aerial7 acquisitions; the impact of recent accounting pronouncements; expectations regarding our strategy, including but not limited to, our intentions to continue to develop and introduce new products, accessories and technologies, the expectation that we will expand our line of cases, skins, screen protectors, batteries, audio products and other similar products and introduce them in other markets throughout the world; expectations regarding our ability to successfully increase our customer base and overall product offering and broaden our distribution base; expectations regarding increased component costs from our suppliers and our ability to partially offset these increases by expected increased operating efficiency as a result of increases in revenue; the expectation that we will further expand our intellectual property position by filing for additional patents in various countries around the world; expectations regarding our product development initiatives and strategies, including product bundling, licensing, acquisitions of complementary and synergistic product families and our intentions to expand our distribution beyond consumer retail channels, and develop new customers in the enterprise, government and education channels; our belief that we can improve our ability to drive higher levels of revenue and earnings, which will ultimately have a positive impact on value creation for our shareholders; our expectation that our cash will primarily be used to fund purchases of short-term investments, fund acquisitions, and fund the accounts receivable, inventory needs and working capital of our business through 2011; our belief that we have the ability to hold all of our marketable debt securities to maturity; the belief that our existing cash, cash equivalents, short-term investments and our cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months; our intention to continue to make capital expenditures and pursue opportunities to acquire businesses, products and technologies; the possibility that we may incur debt financing, sell assets not considered integral to our business or issue additional shares of stock; the timing of amortization of stock-based compensation expense; that our power-saving technology will help us establish an industry standard for reduced power consumption; our intention that cash balances in the United Kingdom will remain there for future growth and investments and to meet liquidity requirements; the possibility we may attempt to access a credit facility; our ability to utilize net operating loss carryforwards; our intentions to disclose information about officers and directors that establish or terminate trading plans; our hedging strategies and the market risks relating to our financial instruments; and our expectations regarding the outcome and anticipated impact of various legal proceedings, commitments and contingencies in which we may be involved, including our potential obligations relating to prior letter of authorization commitments.

These forward-looking statements are based largely on our management’s expectations and involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include those discussed in our Annual Report on Form 10-K for the year ended December 31, 2010 under the heading “Risk Factors” and those set forth in other sections of this report and in other reports that we file with the SEC. Additional factors that could cause actual results to differ materially from those expressed in these forward-looking statements include, among others, the following:

• our dependence on large purchases from significant customers, namely Walmart;

• further declines in sales to RadioShack;

• our ability to expand and diversify our customer base;

• our reliance upon Walmart, as well as other distributors and resellers;

• our ability to expand our revenue base and development new products and product enhancements;

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• the sufficiency of our revenue to absorb expenses;

• fluctuations in our operating results because of: increases in product costs from our suppliers, our suppliers’ ability to perform, the timing of new product and technology introductions and product enhancements relative to our competitors, market acceptance of our products, the size and timing of customer orders, our ability to effectively manage inventory levels, delay or failure to fulfill orders for our products on a timely basis, distribution of or changes in our revenue among distribution partners and retailers, our inability to accurately forecast our contract manufacturing needs, difficulties with new product production implementation or supply chain, product defects and other product quality problems, the degree and rate of growth in our markets and the accompanying demand for our products, our ability to expand our internal and external sales forces and build the required infrastructure to meet anticipated growth, and seasonality of sales;

• increased focus by consumer electronics retailers on their own private label brands;

• decreasing sales prices on our products over their sales cycles;

• our ability to expand our revenue base and develop new products and product enhancements;

• our failure to integrate acquired businesses, products and technologies;

• our reliance on and the risk relating to outsourced manufacturing fulfillment of our products, including potential increases in manufacturing costs;

• our ability to manage our anticipated growth;

• our ability to manage our inventory levels;

• the negative impacts of product returns;

• design and performance issues with our products;

• liability claims;

• our failure to expand or protect our proprietary rights and intellectual property;

• intellectual property infringement claims against us;

• our ability to hire and retain qualified personnel;

• our ability to secure additional financing to meet our future capital needs;

• increased competition and/or reduced demand in our industry;

• our failure to comply with domestic and international laws and regulations;

• economic conditions, political events, war, terrorism, public health issues, natural disasters and similar circumstances;

• volatility in our stock price;

• concentration of stock ownership among our executive officers and principal stockholders;

• provisions in our certificate of incorporation, bylaws and Delaware law, as well as our stockholder rights plan, that could make a proposed acquisition of the Company more difficult; and

• dilution resulting from potential future stock issuances.

In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this report will prove to be accurate. We undertake no obligation to publicly update or revise any forward-looking statements, or any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements.

iGo^®, iGo Green^®, Adapt Mobile^®, andAerial7^® are registered trademarks of iGo, Inc. or its subsidiaries in the United States and other countries. Other names and brands may be claimed as the property of others.

Overview

We are a leading provider of innovative accessories and power management solutions for the electronics industry. Our vision is to attach our products and technology to every mobile electronic device. Increased functionality and the ability to access and manage information remotely are driving the proliferation of mobile electronic devices and applications. The popularity of these devices is increasing due to reductions in size, weight and cost and improvements in functionality, storage capacity and reliability. Each of these devices needs to be powered and connected when in the home, the office, or on the road, and can be accessorized, representing opportunities for one or more of our products.

We design and develop products that make computers and mobile electronic devices more efficient and cost effective, thus enabling professionals and consumers higher utilization of their mobile devices and the ability to access information more readily. Our current product offering primarily consists of power, protection and audio solutions for mobile electronic devices, and we intend to continue to introduce new accessories for mobile electronic devices.

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Power

The centerpiece of our power management solutions is our new proprietary iGo Green^® technology. Our first iGo Green products are laptop chargers and surge protectors which incorporate our new patented technology. Our iGo Green technology reduces energy consumption and almost completely eliminates standby power, or “Vampire Power.” We believe that this power-saving technology, when combined with our existing universal power products, will help us achieve our long-term goal of establishing an industry standard for reduced power consumption when charging mobile electronic devices. In addition, our universal power products allow users to charge a variety of their mobile electronic devices from a single power source through the use of interchangeable tips, which increases end-user convenience and minimizes electronic waste.

Batteries

Through our relationship with Pure Energy Solutions (“Pure Energy”), we are the exclusive marketer and distributor of Pure Energy’s patented rechargeable alkaline (RAMcell) batteries to retailers world wide (excluding China) with non-exclusive distribution rights in Africa. RAMcell batteries are pre-charged and hold a charge for up to 7 years. Approximately three billion single-use alkaline batteries are sold annually in the United States. RAMcell batteries provide users an environmentally friendly, cost-effective alternative to disposable alkaline batteries. We believe that RAMcell batteries and related battery chargers are complimentary to our power-saving technology and contribute to lower levels of electronic waste.

Audio

As a result of our acquisition of Aerial7 Industries, Inc. (“Aerial7”), we now offer a line of earbuds and headphones. As mobile phones have recently evolved into smartphones and the introduction of new portable media devices, all of which are capable of playing music and video, many consumers utilize a variety of mobile electronic devices for both communication and entertainment purposes. Our audio products are uniquely designed to provide enhanced sound quality compared to competitive products at similar price points. Our line of audio products also offer consumers the ability to both communicate with others via an integrated microphone that can be used with a portable computer, mobile phone, computer or other portable media device as well the ability to listen to music or video from these devices. Similar to our protection products and in addition to the quality sound output delivered by our audio products, our line of audio products is also fashionably designed, allowing consumers to express their unique and personal style. Currently, these products are offered primarily through lifestyle and music retailers around the world, however we intend to expand our audio product offering and introduce these and similar products in consumer electronics retailers around the world as well.

Protection

As a result of our acquisition of Adapt Mobile Limited (“Adapt”), we now offer a line of skins, cases and screen protectors for mobile electronic devices. Consumers value the protection of their mobile electronic devices as they rely on them heavily in their daily lives to both connect with others and store important information. In addition, consumers often view these products as a way to express their personal fashion and style, similar to clothing and other accessories. Our line of protection products is designed to meet both of these consumer needs by providing the consumer with a high degree of protection, while simultaneously offering them a unique fashionable design that fits their personal style. Currently, we offer these products primarily in Europe, however we expect to expand our line of cases, skins, screen protectors and other similar products and introduce them in other markets throughout the world.

Our ability to execute successfully on our near and long-term objectives depends largely upon the general market acceptance of our power, protection and audio products, our ability to protect our unique proprietary rights, including notable our iGo Green technology, our ability to generate additional major customers, and general economic conditions. Additionally, we must execute on the customer relationships that we have developed and continue to design, develop, manufacture and market new and innovative technology and products that are embraced by these customers and the overall market.

Recent Developments

In February 2011, we entered into a marketing, distribution and licensing agreement with Pure Energy, a manufacturer of rechargeable alkaline batteries. Pursuant to the agreement, iGo will be the exclusive marketer and distributor of Pure Energy’s patented rechargeable alkaline batteries to retailers worldwide (excluding China) with non-exclusive distribution rights in Africa. We also simultaneously entered into an agreement with Premier Tech Home & Garden to take over its current distribution rights for Pure Energy batteries in Canada. As part of the agreement with Premier Tech Home & Garden, we purchased inventory to support sales to these accounts. As part of our agreement with Pure Energy, we will pay certain ongoing royalties to Pure Energy on future sales for the use of the Pure Energy brand, the use of Pure Energy charger technology, and our sales to specific customers. The initial term of the agreement is five years, provided, however, that we must achieve annual minimum sales targets in order to retain our exclusive distribution rights. If we achieve our annual minimum sales targets, we will have the option to extend the agreement for a total of 15 years.

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In May 2011, we entered into an investment agreement with Pure Energy Visions Corporation (“Pure Energy Visions”) and expanded our distribution and licensing agreements with its parent company, Pure Energy. Our investment is intended to fund further developments in rechargeable alkaline battery technology and improve the economics of the product line. In return for a total investment of $1.6 million in Pure Energy Visions, we received 2,142,858 shares of Pure Energy Visions common stock (which is traded on the Canadian TSX Venture Exchange under the ticker symbol PEV.V), an interest-free convertible secured debenture having a one-year repayment term that converts into an additional 2,142,858 shares of Pure Energy Visions common stock in lieu of repayment either upon the achievement of certain business goals or earlier at our discretion, and a technology license.

Critical Accounting Policies and Estimates

There were no changes in our critical accounting policies during the six months ended June 30, 2011 from those set forth in our Annual Report on Form 10-K for the year ended December 31, 2010.

Results of Operations

The following table presents certain selected consolidated financial data for the periods indicated expressed as a percentage of total revenue:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of revenue		74.1	%		66.0	%		71.8	%		66.7	%
Gross profit		25.9	%		34.0	%		28.2	%		33.3	%
Operating expenses:
Sales and marketing		20.0	%		16.8	%		20.9	%		19.0	%
Research and development		5.6	%		4.0	%		5.4	%		4.0	%
General and administrative		18.8	%		18.3	%		20.3	%		19.1	%
Total operating expenses		44.4	%		39.1	%		46.6	%		42.1	%
Loss from operations		(18.6	)%		(5.1	)%		(18.4	)%		(8.8	)%
Other income (expense):
Interest, net		0.2	%		0.4	%		0.2	%		0.5	%
Other, net		0.5	%		0.6	%		0.4	%		10.3	%
Net income (loss)		(17.9	)%		(4.1	)%		(17.8	)%		2.0	%

Comparison of Three Months Ended June 30, 2011 and 2010

Revenue. Revenue generally consists of sales of products, net of returns and allowances. To date, our revenues have come predominantly from power adapters and accessories. The following table summarizes the year-over-year comparison of our consolidated revenue for the periods indicated (dollars in thousands):

	Three Months		Three Months		Increase		Percentage change
	Ended		Ended		From same period		from the same period
	June 30, 2011		June 30, 2010		in the prior year		in the prior year
Revenue	$	10,831	$	9,748	$	1,083		11.1	%

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Following is a breakdown of revenue by significant account for the three months ended June 30, 2011 and 2010 with the corresponding dollar and percent changes (dollars in thousands):

	For the three months ended June 30
	2011					2010
	Sales		% of Total Sales			Sales		% of Total Sales			$ Change			% Change
Walmart		2,393		22	%		1,486		15	%		907			61.0	%
Belkin		1,007		9	%		428		5	%		579			135.3	%
Office Depot		505		5	%		367		4	%		138			37.6	%
RadioShack		1,035		10	%		3,739		38	%		(2,704	)		(72.3	)%
All other customers		5,891		54	%		3,728		38	%		2,163			58.0	%
		10,831		100	%		9,748		100	%		1,083			11.1	%

The increase in revenue for the three months ended June 30, 2011 as compared to the three months ended June 30, 2010 was primarily due to the addition of battery, audio and protection product lines as a result of Adapt and Aerial7 acquisitions in the second half of 2010 and the Pure Energy relationship in the first quarter of 2011, combined with the increases in sales to Walmart, Belkin and Office Depot as indicated in the table above. The battery, audio and protection product lines contributed $1.5 million to revenue for the three months ended June 30, 2011, compared to $0 for the three months ended June 30, 2010, and the corresponding revenue is included in the table above under the caption “All other customers”. These increases in revenue were partially offset by the decrease in sales to RadioShack as indicated in the table above. Overall, the increase in revenue was attributable to increased volume, primarily due to the addition of the audio, battery and protection product lines in 2011. We are working to continue to broaden our distribution base during 2011 with the goal of reducing our dependence on sales to Walmart and RadioShack in the future. Furthermore, Belkin has not provided us a forecast for future orders and it is likely our sales to Belkin will decline in the future.

Cost of revenue, gross profit and gross margin. Cost of revenue generally consists of costs associated with components, outsourced manufacturing and in-house labor associated with assembly, testing, packaging, shipping and quality assurance, depreciation of equipment and indirect manufacturing costs. Gross profit is the difference between revenue and cost of revenue. Gross margin is gross profit stated as a percentage of revenue. The following table summarizes the year-over-year comparison of our cost of revenue, gross profit and gross margin for the periods indicated (dollars in thousands):

	Three Months			Three Months			Increase/(decrease)			Percentage change
	Ended			Ended			From same period			from the same period
	June 30, 2011			June 30, 2010			in the prior year			in the prior year
Cost of revenue	$	8,031		$	6,436		$	1,595			24.8	%
Gross profit	$	2,800		$	3,312		$	(512	)		(15.5	)%
Gross margin		25.9	%		34.0	%		(8.1	)%	NA

The increase in cost of revenue was due primarily to the increase in revenue discussed above. The decrease in gross margin was primarily due to a decrease in average direct margin, which excludes labor and overhead costs, to 42.0% for the three months ended June 30, 2011 compared to 49.1% for the three months ended June 30, 2010, primarily as a result of increased product costs and decreased sales prices on sales of power products. Labor and overhead expenses, which are mostly fixed, increased by $276,000 to $1.8 million, or 16.2% of revenue, for the three months ended June 30, 2011, compared to $1.5 million, or 15.1% of revenue, for the three months ended June 30, 2010. As a result, cost of revenue as a percentage of revenue increased to 74.1% for the three months ended June 30, 2011 from 66.0% for the three months ended June 30, 2010. We continue to see increases in component costs from our primary Asian suppliers combined with increased competition and lower sales prices for our power products, and as a result, we expect gross margins to remain the same or decline slightly for the balance of 2011 compared to 2010.

Sales and marketing. Sales and marketing expenses generally consist of salaries, commissions and other personnel-related costs of our sales, marketing and support personnel, advertising, public relations, promotions, printed media and travel. The following table summarizes the year-over-year comparison of our sales and marketing expenses for the periods indicated (dollars in thousands):

	Three Months		Three Months		Increase		Percentage change
	Ended		Ended		From same period		from the same period
	June 30, 2011		June 30, 2010		in the prior year		in the prior year
Sales and marketing	$	2,165	$	1,634	$	531		32.5	%

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The increase in sales and marketing expenses primarily resulted from the increases of approximately $314,000 in personnel-related expenses, primarily due to the addition of personnel from the Adapt and Aerial7 acquisitions, and $217,000 in marketing and advertising expenses for the three months ended June 30, 2011, compared to the three months ended June 30, 2010. As a percentage of revenue, sales and marketing expenses increased to 20.0% for the three months ended June 30, 2011 from 16.8% for the three months ended June 30, 2010.

Research and development. Research and development expenses consist primarily of salaries and personnel-related costs, outside consulting, lab costs and travel-related costs of our product development group. The following table summarizes the year-over-year comparison of our research and development expenses for the periods indicated (dollars in thousands):

	Three Months		Three Months		Increase		Percentage change
	Ended		Ended		From same period		from the same period
	June 30, 2011		June 30, 2010		in the prior year		in the prior year
Research and development	$	606	$	390	$	216		55.4	%

The increase in research and development expenses primarily resulted from the increases of approximately $108,000 in personnel-related expenses, primarily due to the addition of personnel from the Adapt and Aerial7 acquisitions, for the three months ended June 30, 2011, compared to the three months ended June 30, 2010. Non-recurring engineering expenses also increased by $124,000 for the three months ended June 30, 2011, primarily due to the development of our power-saving microchip with Texas Instruments, compared to the three months ended June 30, 2010. As a percentage of revenue, research and development expenses increased to 5.6% for the three months ended June 30, 2011 from 4.0% for the three months ended June 30, 2010.

General and administrative. General and administrative expenses consist primarily of salaries and other personnel-related expenses of our finance, human resources, information systems, corporate development and other administrative personnel, as well as facilities, legal and other professional fees, depreciation and amortization and related expenses. The following table summarizes the year-over-year comparison of our general and administrative expenses for the periods indicated (dollars in thousands):

	Three Months		Three Months		Increase		Percentage change
	Ended		Ended		From same period		from the same period
	June 30, 2011		June 30, 2010		in the prior year		in the prior year
General and administrative	$	2,039	$	1,785	$	254		14.2	%

The increase in general and administrative expenses primarily resulted from an increase of $213,000 in equity compensation expense during the three months ended June 30, 2011 compared to the three months ended June 30, 2010. General and administrative expenses as a percentage of revenue increased slightly to 18.8% for the three months ended June 30, 2011 from 18.3% for the three months ended June 30, 2010.

Interest income, net. Interest income, net decreased by $19,000 to $21,000 for the three months ended June 30, 2011 compared to $40,000 for the three months ended June 30, 2010. The decrease was primarily due to collection in full of notes receivable during 2010 and decreased short-term investment balances during 2011. At June 30, 2011, the average yield on our cash and short-term investments was approximately 0%.

Gain on disposal of assets and other income, net. Gain on disposal of assets and other income, net was $50,000 for the three months ended June 30, 2011 compared to $57,000 for the three months ended June 30, 2010.

Income taxes. No provision for income taxes was required for the three months ended June 30, 2011 or 2010. Based on historical operating losses and projections for future taxable income, it is more likely than not that we will not fully realize the benefits of the net operating loss carryforwards. We have not, therefore, recorded a tax benefit from our net operating loss carryforwards for either of the three months ended June 30, 2011 or June 30, 2010, which at June 30, 2011 totaled approximately $157 million.

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Comparison of Six Months Ended June 30, 2011 and 2010

Revenue. Revenue generally consists of sales of products, net of returns and allowances. To date, our revenue has come predominantly from power adapters, handheld products, expansion and docking products, and accessories. The following table summarizes the year-over-year comparison of our consolidated revenue for the periods indicated (dollars in thousands):

	Six Months		Six Months		Increase from		Percentage change
	Ended		Ended		same period in the		from the same period
	June 30, 2011		June 30, 2010		prior year		in the prior year
Revenue	$	20,059	$	17,916	$	2,143		12.0	%

Following is a breakdown of revenue by significant account for the six months ended June 30, 2011 and 2010 with the corresponding dollar and percent changes (dollars in thousands):

	For the six months ended June 30
	2011					2010
	Sales		% of Total Sales			Sales		% of Total Sales			$ Change			% Change
Walmart		4,595		23	%		2,241		13	%		2,354			105.0	%
Belkin		1,906		10	%		1,072		6	%		834			77.8	%
Office Depot		1,354		7	%		367		2	%		987			268.9	%
RadioShack		1,540		8	%		6,968		39	%		(5,428	)		(77.9	)%
All other customers		10,664		52	%		7,268		40	%		3,396			46.7	%
		20,059		100	%		17,916		100	%		2,143			12.0	%

The increase in revenue for the six months ended June 30, 2011 as compared to the six months ended June 30, 2010 was primarily due to the addition of battery, audio and protection product lines as a result of Adapt and Aerial7 acquisitions in the second half of 2010 and the Pure Energy relationship in the first quarter of 2011, combined with the increases in sales to Walmart, Belkin and Office Depot as indicated in the table above. The battery, audio and protection product lines contributed $2.5 million to revenue for the six months ended June 30, 2011, compared to $0 for the six months ended June 30, 2010, and the corresponding revenue is included in the table above under the caption “All other customers”. These increases in revenue were partially offset by the decrease in sales to RadioShack as indicated in the table above. Overall, the increase in revenue was attributable to increased volume, primarily due to the addition of the audio, battery and protection product lines in 2011. We are working to continue to broaden our distribution base during 2011 with the goal of reducing our dependence on sales to Walmart and RadioShack in the future. Furthermore, Belkin has not provided us a forecast for future orders and it is likely our sales to Belkin will decline in the future.

Cost of revenue, gross profit and gross margin. Cost of revenue generally consists of costs associated with components, outsourced manufacturing and in-house labor associated with assembly, testing, packaging, shipping and quality assurance, depreciation of equipment and indirect manufacturing costs. Gross profit is the difference between revenue and cost of revenue. Gross margin is gross profit stated as a percentage of revenue. The following table summarizes the year-over-year comparison of our cost of revenue, gross profit and gross margin for the periods indicated (dollars in thousands):

	Six Months			Six Months			Increase/(decrease)			Percentage change from
	Ended			Ended			from same period in			the same period in the
	June 30, 2011			June 30, 2010			the prior year			prior year
Cost of revenue	$	14,400		$	11,953		$	2,447			20.5	%
Gross profit	$	5,659		$	5,963		$	(304	)		(5.1	)%
Gross margin		28.2	%		33.3	%		(5.1	)%	NA

The increase in cost of revenue was due primarily to the increase in revenue discussed above. The decrease in gross margin was primarily due to a decrease in average direct margin, which excludes labor and overhead costs, to 43.5% for the six months ended June 30, 2011 compared to 47.1% for the six months ended June 30, 2010, primarily as a result of increased product costs and decreased sales prices on sales of power products. Labor and overhead expenses, which are mostly fixed, increased by $621,000 to $3.1 million, or 15.3% of revenue, for the six months ended June 30, 2011, compared to $2.5 million, or 13.8% of revenue, for the six months ended June 30, 2010. As a result, cost of revenue as a percentage of revenue increased to 71.8% for the six months ended June 30, 2011 from 66.7% for the six months ended June 30, 2010. We continue to see increases in component costs from our primary Asian suppliers combined with increased competition and lower sales prices for our power products, and as a result, we expect gross margins to remain the same or decline slightly for the balance of 2011 compared to 2010.

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Sales and marketing. Sales and marketing expenses generally consist of salaries, commissions and other personnel-related costs of our sales, marketing and support personnel, advertising, public relations, promotions, printed media and travel. The following table summarizes the year-over-year comparison of our sales and marketing expenses for the periods indicated (dollars in thousands):

	Six Months		Six Months		Increase from		Percentage change
	Ended		Ended		same period in the		from the same period
	June 30, 2011		June 30, 2010		prior year		in the prior year
Sales and marketing	$	4,202	$	3,405	$	797		23.4	%

The increase in sales and marketing expenses primarily resulted from increases of approximately $501,000 in personnel related expenses, primarily due to the addition of personnel from the Adapt and Aerial7 acquisitions, and $200,000 in marketing and advertising expenses for the six months ended June 30, 2011 compared to the six months ended June 30, 2010. As a percentage of revenue, sales and marketing expenses increased to 20.9% for the six months ended June 30, 2011 from 19.0% for the six months ended June 30, 2010.

Research and development. Research and development expenses primarily consist of salaries and personnel-related costs, outside consulting, lab costs and travel-related costs of our product development group. The following table summarizes the year-over-year comparison of our research and development expenses for the periods indicated (dollars in thousands):

	Six Months		Six Months		Increase from		Percentage change
	Ended		Ended		same period in the		from the same period
	June 30, 2011		June 30, 2010		prior year		in the prior year
Research and development	$	1,077	$	709	$	368		51.9	%

The increase in research and development expenses primarily resulted from the increases of approximately $201,000 in personnel-related expenses, primarily due to the addition of personnel from the Adapt and Aerial7 acquisitions, for the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Non-recurring engineering expenses also increased by $136,000 for the six months ended June 30, 2011, primarily due to the development of our power-saving microchip with Texas Instruments, compared to the six months ended June 30, 2010. As a percentage of revenue, research and development expenses increased to 5.4% for the six months ended June 30, 2011 from 4.0% for the six months ended June 30, 2010.

General and administrative. General and administrative expenses primarily consist of salaries and other personnel-related expenses of our finance, human resources, information systems, corporate development and other administrative personnel, as well as facilities, legal and other professional fees, depreciation and amortization and related expenses. The following table summarizes the year-over-year comparison of our general and administrative expenses for the periods indicated (dollars in thousands):

	Six Months		Six Months		Increase from		Percentage change
	Ended		Ended June		same period in the		from the same period
	June 30, 2011		30, 2010		prior year		in the prior year
General and administrative	$	4,080	$	3,422	$	658		19.2	%

The increase in general and administrative expenses primarily resulted from an increase of $368,000 in equity compensation expense, $217,000 in amortization expense, and $78,000 in bad debt expense during the six months ended June 30, 2011 compared to the six months ended June 30, 2010. General and administrative expenses as a percentage of revenue increased to 20.3% for the six months ended June 30, 2011 from 19.1% for the six months ended June 30, 2010.

Interest income, net. Interest income, net decreased by $54,000 to $42,000 for the six months ended June 30, 2011 compared to $96,000 for the six months ended June 30, 2010. The decrease was primarily due to collection in full of notes receivable during 2010 and decreased short-term investment balances during 2011. At June 30, 2011, the average yield on our cash and short-term investments was approximately 0%.

Other income, net. Other income, net was $80,000 for the six months ended June 30, 2011 compared to $1.8 million for the six months ended June 30, 2010. The decrease in other income was primarily due to the reversal of the reserve against the Mission note receivable, which resulted in the recognition of a gain of $1.7 million in the 2010 period.

17

Income taxes. No provision for income taxes was required for the six months ended June 30, 2011 or 2010. Based on historical operating losses and projections for future taxable income, it is more likely than not that we will not fully realize the benefits of the net operating loss carryforwards. We have not, therefore, recorded a tax benefit from our net operating loss carryforwards for either of the six months ended June 30, 2011 or June 30, 2010, which at June 30, 2011 was $157 million.

Operating Outlook

Due to increased competition, both from third parties and private-label brands offered by some of our retail customers, we have experienced a decline in demand for our power products with our traditional customer base. We were successful throughout 2010, however, in increasing our customer base, primarily with the addition of Walmart, and increasing our overall product offering primarily through the acquisitions of Adapt and Aerial7 and in 2011, through our new distribution agreement with Pure Energy. As a result, even though we continue to face increased competition from private-label brands offered by some of our retail customers, including most notably RadioShack, we expect our total 2011 revenue to approximate our 2010 revenue.

We continue to see increases in component costs from our primary Asian suppliers. As a result, we expect gross margins to decline in 2011 compared to 2010. Although we expect operating expenses to increase in 2011 compared to 2010, primarily as a result of increased operating expenses associated with the acquisitions of Adapt and Aerial7 and increased personnel and operational costs related to the anticipated growth of our business, we are currently making reductions in our cost structure to minimize anticipated losses over the remainder of 2011.

We anticipate increased research and development expenses in 2011 compared to 2010, primarily as a result of the continued development of our iGo Green technology, including expenses relating to the collaborative development of an integrated circuit with Texas Instruments based on our iGo Green technology. As a result of our planned research and development efforts, we expect to further expand our intellectual property position by filing for additional patents in various countries around the world. A portion of these costs are recorded as research and development expense as incurred, and a portion are capitalized and amortized as general and administrative expense. We may also incur additional legal and related expenses associated with the defense and enforcement of our intellectual property portfolio, which could increase our general and administrative expenses.

In addition to our line of power products, we have recently introduced a variety of new mobile electronics accessories both as a result of our internal design efforts and as a result of our acquisition of Adapt and Aerial7 and our distribution agreement with Pure Energy. We expect to continue to introduce additional mobile electronics accessory products in the future as we execute on our vision to attach our products and technology to every mobile electronic device. In order to continue to grow our business and enhance shareholder value, we believe it is necessary to continue to expand our product portfolio. Moving forward, we intend to continue to explore a number of initiatives designed to broaden our product portfolio within the mobile electronics accessories space. We currently plan that the initiatives will consist of internal product development, sourcing products from third-parties, joint marketing ventures, product bundling, licensing opportunities, and acquisitions of complementary and synergistic product families and companies. We also have initiatives to expand our distribution beyond consumer retail with the intent to sell products into the enterprise, government and education channels. All of these initiatives are designed to leverage the inherent strengths of our business, most notably, our strong balance sheet, our compelling portfolio of intellectual property, and our established brand and relationships with major retailers. As we continue to execute on this vision, we believe we can improve our ability to drive higher levels of revenue and earnings, which will ultimately have a positive impact on value creation for our shareholders.

Liquidity and Capital Resources

Cash and Cash Flow. Our available cash and cash equivalents are held in bank deposits and money market funds in the United States and in the United Kingdom. Our intent is that the cash balances in the United Kingdom will remain there for future growth and investments, and we will meet any liquidity requirements in the United States through ongoing cash flows, external financing, or both. We actively monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on safety of principal while secondarily maximizing yield on those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one of these entities. To date, we have experienced no material loss or lack of access to our invested cash or cash equivalents; however, we can provide no assurances that access to our invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets.

At any point in time we have funds in our operating accounts that are with third-party financial institutions. These balances in the U.S. may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. While we monitor the cash balances in our operating accounts and adjust the cash balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail or could be subject to other adverse conditions in the financial markets.

18

Our primary use of cash has been to fund purchases of investments, fund acquisitions, and fund working capital needs of our business, which we expect to continue through 2011. Some of our new suppliers of protection and audio have been unwilling to extend trade credit to us on the same terms and conditions as our power product suppliers have historically done. As a result, we are required to pay for purchases of inventory in advance of the related sale of these products, which has increased our use of cash to support the working capital required to effectively operate our business. Historically, our primary sources of liquidity have been funds provided by the sale of intellectual property assets. We cannot assure you that this source will be available to us in the future.

We currently do not maintain a credit facility with a bank, however, we may attempt to access to this source of financing at some point in the future. Capital markets in the United States and throughout the world remain tight, which could impact our ability to obtain additional or alternative financing, including a credit facility with a bank.

The following table sets forth for the period presented certain consolidated cash flow information (dollars in thousands):

	Six Months Ended June 30,
	2011			2010
Net cash (used in) provided by operating activities	$	(6,532	)	$	1,758
Net cash provided by (used in) investing activities		3,387			(7,308	)
Net cash provided by financing activities		—			—
Foreign currency exchange impact on cash flow		177			(116	)
Decrease in cash and cash equivalents	$	(2,968	)	$	(5,666	)
Cash and cash equivalents at beginning of period	$	9,942		$	19,775
Cash and cash equivalents at end of period	$	6,974		$	14,109

•	Net cash (used in) provided by operating activities. Cash was used in our operating activities for the six months ended June 30, 2011 to fund the working capital needs of our business, including inventory purchases. We expect to continue to use cash in operating activities through 2011 to support the anticipated growth of our business.
	Our consolidated cash flow operating metrics are as follows:

	Six Months Ended
	June 30,
	2011		2010
Days outstanding in ending accounts receivable (“DSOs”)		64		68
Inventory turns		3		5

	The decrease in DSOs at June 30, 2011 compared to June 30, 2010 was primarily due to decrease in sales to RadioShack, which generally requires longer payment terms. We expect DSOs will increase in the second half of 2011 as our revenue base increases. The decrease in inventory turns was primarily due to the decline in revenue from sales to RadioShack, for whom we hold no inventory. We expect to manage inventory growth during 2011 and we expect inventory turns for the remainder of 2011 to remain consistent with the period ended June 30, 2011.
•	Net cash provided by (used in) investing activities. For the six months ended June 30, 2011, net cash was generated by investing activities primarily as a result of the sale of short-term investments, partially offset by our investments in Pure Energy Visions.
•	Net cash provided by financing activities. We had no cash flows from financing activities during the first six months of 2011 or 2010.

Investments. At June 30, 2011, our investments in marketable securities included one issuance of corporate common stock, one corporate debenture, ten corporate bonds, five commercial paper instruments issued by various companies, one United States government securities, and one municipal mutual fund with an aggregate fair value of approximately $10.3 million.

19

In June 2011, we made an investment in Pure Energy, in which we received 2,142,858 shares of Pure Energy Visions common stock at a price per share equal to $0.286, and an interest-free convertible secured debenture having a one-year repayment term that converts into an additional 2,142,858 shares of Pure Energy Visions common stock in lieu of repayment either upon the achievement of certain business goals or earlier at our discretion.

We believe we have the ability to hold all marketable debt securities to maturity. However, we may dispose of debt securities prior to their scheduled maturity due to changes in interest rates, prepayments, tax and credit considerations, liquidity or regulatory capital requirements, or other similar factors. As a result, we classify all marketable securities as available-for-sale. These securities are reported at fair value based on third-party broker statements, which represents level 2 in the fair value hierarchy. Our investment in Pure Energy is reported at fair value based on a quoted market price, which represents level 1 in the fair value hierarchy. Accordingly, unrealized gains and losses related to these investments are reported in equity as a separate component of accumulated other comprehensive income (loss).

Contractual Obligations. In our day-to-day business activities, we incur certain commitments to make future payments under contracts such as operating leases and purchase orders. Maturities under these contracts are set forth in the following table as of June 30, 2011 (dollars in thousands):

	Payment due by period
	2011		2012		2013		2014		2015		More than 5 years
Operating lease obligations	$	222	$	452	$	463	$	83	$	—	$	—
Inventory Purchase obligations		8,292		—		—		—		—		—
Totals	$	8,514	$	452	$	463	$	83	$	—	$	—

Off-Balance Sheet Arrangements. We have no off-balance sheet financing arrangements.

Acquisitions and Dispositions. In 2010 we acquired Adapt and Aerial7 to complement our product offerings and expand our revenue base. Our future strategy includes the possible acquisition of other businesses to continue to expand or complement our operations. The magnitude, timing and nature of any future acquisitions will depend on a number of factors, including the availability of suitable acquisition candidates, the negotiation of acceptable terms, our financial capabilities and general economic and business conditions. Financing of future acquisitions would result in the utilization of cash, incurrence of additional debt, issuance of additional equity securities or a combination of all of these. Our future strategy may also include the possible disposition of assets that are not considered integral to our business which would likely result in the generation of cash.

Net Operating Loss Carryforwards. As of June 30, 2011, we had approximately $157 million of federal, foreign and state net operating loss carryforwards which expire at various dates. We anticipate that the sale of common stock in our initial public offering and in subsequent private offerings, as well as the issuance of our common stock for acquisitions, coupled with prior sales of common stock will cause an annual limitation on the use of our net operating loss carryforwards pursuant to the change in ownership provisions of Section 382 of the Internal Revenue Code of 1986, as amended. This limitation is expected to have a material effect on the timing of our ability to use the net operating loss carryforwards in the future. Additionally, our ability to use the net operating loss carryforwards is dependent upon our future level of profitability, which cannot be determined.

Liquidity Outlook. Based on our projections, we believe that our existing cash, cash equivalents, short-term investments and our cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. If we require additional capital resources to grow our business internally or to acquire complementary technologies and businesses at any time in the future, we may seek to obtain debt financing or sell additional equity securities. The sale of additional equity securities would result in more dilution to our stockholders. In addition, additional capital resources may not be available to us in amounts or on terms that are acceptable to us.

Recent Accounting Pronouncements

See Note 1 to our condensed consolidated financial statements for a summary of recently issued accounting pronouncements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks in the ordinary course of our business. These risks result primarily from changes in foreign currency exchange rates and interest rates. In addition, our international operations are subject to risks related to differing economic conditions, changes in political climate, differing tax structures and other regulations and restrictions.

To date we have not utilized derivative financial instruments or derivative commodity instruments. We do not expect to employ these or other strategies to hedge market risk in the foreseeable future. We invest our cash in money market funds, which are subject to minimal credit and market risk. We believe that the market risks associated with these financial instruments are immaterial.

See “Liquidity and Capital Resources” for further discussion of our capital structure. Market risk, calculated as the potential change in fair value of our cash and cash equivalents and resulting from a hypothetical 1.0% (100 basis point) change in interest rates, was not material at June 30, 2011.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures — We maintain disclosure controls and other procedures that are designed to ensure that information required to be disclosed in our filings with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. With the participation of the principal executive officer and principal financial officer, management conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2011, and concluded that our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting — There was no change in our internal control over financial reporting during the quarter ended June 30, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are, from time to time, party to certain legal proceedings that arise in the ordinary course and are incidental to our business. Although litigation is inherently uncertain, based on past experience and the information currently available, our management does not believe that any currently pending and threatened litigation or claims will have a material adverse effect on the Company’s consolidated financial position or results of operations. However, future events or circumstances, currently unknown to management will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our consolidated financial position, liquidity or results of operations in any future reporting period.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I. “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010, which could materially affect our business, financial condition or future results. There have been no material changes in our risk factors from the disclosure included in our Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 5. OTHER INFORMATION

We have a policy governing transactions in our securities by directors, officers, employees and others which permits these individuals to enter into trading plans complying with Rule 10b5-l under the Securities Exchange Act of 1934, as amended. We have been advised that Michael D. Heil, our President and Chief Executive Officer, Darryl S. Baker, our Vice President and Chief Financial Officer, and Brian M. Roberts, our Vice President, General Counsel and Secretary, each entered into trading plans on May 10, 2011, each of which was in accordance with Rule 10b5-l and our policy governing transactions in our securities. Further, as previously disclosed, Mr. Heil also entered into a trading plan on May 13, 2010 that remains effective. Generally, under these trading plans, the individual relinquishes control over the transactions once the trading plan is put into place. Accordingly, sales under these plans may occur at any time, including possibly before, simultaneously with, or immediately after significant events involving the Company.

We anticipate that, as permitted by Rule 10b5-l and our policy governing transactions in our securities, some or all of our directors, officers and employees may establish or terminate trading plans in the future. We intend to disclose the names of executive officers and directors who establish or terminate a trading plan in compliance with Rule 10b5-l and the requirements of our policy governing transactions in our securities in our future quarterly and annual reports on Form 10-Q and 10-K filed with the Securities and Exchange Commission. We undertake no obligation, however, to update or revise the information provided herein, including for revision or termination of an established trading plan, other than in such quarterly and annual reports.

ITEM 6. EXHIBITS

The Exhibit Index and required Exhibits immediately following the Signatures to this Form 10-Q are filed as part of, or hereby incorporated by reference into, this Form 10-Q.

22

IGO, INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IGO, INC.
Dated: August 5, 2011	By:	/s/ Michael D. Heil
		Michael D. Heil
		President and Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Darryl S. Baker
		Darryl S. Baker
		Vice President and Chief Financial Officer and Authorized Officer of Registrant (Principal Financial Officer)

23

EXHIBIT INDEX

Exhibit
Number			Description of Document
	3.1		Certificate of Incorporation of the Company (1)
	3.2		Articles of Amendment to the Certificate of Incorporation of the Company dated as of June 17, 1997 (2)
	3.3		Articles of Amendment to the Certificate of Incorporation of the Company dated as of September 10, 1997 (1)
	3.4		Articles of Amendment to the Certificate of Incorporation of the Company dated as of July 20, 1998 (1)
	3.5		Articles of Amendment to the Certificate of Incorporation of the Company dated as of February 3, 2000 (1)
	3.6		Articles of Amendment to the Certificate of Incorporation of the Company dated as of March 31, 2000 (2)
	3.7		Certificate of Designations, Preferences, Rights and Limitations of Series G Junior Participating Preferred Stock of the Company (3)
	3.8		Certificate of Ownership and Merger Merging iGo Merger Sub Inc. with and into Mobility Electronics, Inc. (4)
	3.9		Certificate of Elimination of Series C, Series D, Series E, and Series F Preferred Stock of the Company (4)
	3.10		Fourth Amended and Restated Bylaws of the Company (5)
	31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
	31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
	32.1		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
	101	**	XBRL Instance Document
	101	**	XBRL Taxonomy Extension Schema Document
	101	**	XBRL Taxonomy Calculation Linkbase Document
	101	**	XBRL Taxonomy Label Linkbase Document
	101	**	XBRL Taxonomy Presentation Linkbase Document

** Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

*	Filed/furnished herewith
+	Management or compensatory plan or agreement.
(1)	Previously filed as an exhibit to Registration Statement No. 333-30264 dated February 11, 2000.
(2)	Previously filed as an exhibit to Amendment No. 2 to Registration Statement No. 333-30264 on Form S-1 dated May 4, 2000.
(3)	Previously filed as an exhibit to Current Report on Form 8-K filed June 19, 2003.
(4)	Previously filed as an exhibit to Current Report on Form 8-K dated May 21, 2008.
(5)	Previously filed as an exhibit to Form 10-K for the period ended December 31, 2008.

24

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Michael D. Heil, certify that:

1. I have reviewed this quarterly report on Form 10-Q of iGo, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Michael D. Heil

Michael D. Heil

President and Chief Executive Officer

August 5, 2011

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Darryl S. Baker, certify that:

1. I have reviewed this quarterly report on Form 10-Q of iGo, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Darryl S. Baker

Darryl S. Baker

Vice President and Chief Financial Officer

August 5, 2011

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Executive Officer and the Chief Financial Officer of iGo, Inc. (the “Company”), each certifies that, to his knowledge on the date of this certification:

1. The quarterly report of the Company for the period ending June 30, 2011 as filed with the Securities and Exchange Commission on this date (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 5, 2011	/s/ Michael D. Heil
	Michael D. Heil
	President and Chief Executive Officer
	/s/ Darryl S. Baker
	Darryl S. Baker
	Vice President and Chief Financial Officer

XML



Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	90,000,000	90,000,000
Common stock, shares issued	33,430,781	32,893,892
Common stock, shares outstanding	33,430,781	32,893,892

XML



Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Operations [Abstract]
Revenue	$ 10,831	$ 9,748	$ 20,059	$ 17,916
Cost of revenue	8,031	6,436	14,400	11,953
Gross profit	2,800	3,312	5,659	5,963
Operating expenses:
Sales and marketing	2,165	1,634	4,202	3,405
Research and development	606	390	1,077	709
General and administrative	2,039	1,785	4,080	3,422
Total operating expenses	4,810	3,809	9,359	7,536
Loss from operations	(2,010)	(497)	(3,700)	(1,573)
Other income, net:
Interest income, net	21	40	42	96
Gain on disposal of assets and other income, net	50	57	80	1,846
Net income (loss)	$ (1,939)	$ (400)	$ (3,578)	$ 369
Net income (loss) per share
Basic	$ (0.06)	$ (0.01)	$ (0.11)	$ 0.01
Diluted	$ (0.06)	$ (0.01)	$ (0.11)	$ 0.01
Weighted average common shares outstanding
Basic	33,315	32,750	33,170	32,654
Diluted	33,315	32,750	33,170	33,965

XML



Document and Entity Information (USD $) In Millions, except Share data	6 Months Ended
	Jun. 30, 2011	Aug. 02, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	iGo, Inc.
Entity Central Index Key	0001075656
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 34
Entity Common Stock, Shares Outstanding		33,433,759

XML



Gain on Disposal of Assets and Other Income, net

6 Months Ended

Jun. 30, 2011

Gain on Disposal of Assets and Other Income, net [Abstract]

Gain on Disposal of Assets and Other Income, net

(7) Gain on Disposal of Assets and Other Income, net

On April 19, 2010, the Company entered into a transaction with Mission Technology Group (“Mission”) that resulted in complete collection of the remaining unpaid principal balance of $1,700,000 of its note receivable and the sale of its 15% common equity interest in Mission. As the Company had previously recorded a valuation allowance of $1,714,000 against the promissory note, the Company determined that as of March 31, 2010, based on the subsequent collection of $1,700,000 as payment-in-full against the note receivable, collectability of the note was reasonably assured. Accordingly, the Company reversed its valuation allowance against the note receivable and recorded a gain of $1,714,000 during the three months ended March 31, 2010.

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Investments

6 Months Ended

Jun. 30, 2011

Investments [Abstract]

Investments

(3) Investments

Short-term

The Company has determined that all of its investments in short-term marketable securities should be classified as available-for-sale and reported at fair value.

The Company assesses its investments in marketable securities for other-than-temporary declines in value by considering various factors that include, among other things, any events that may affect the creditworthiness of a security’s issuer, the length of time the security has been in a loss position, and the Company’s ability and intent to hold the security until a forecasted recovery of fair value.

The Company generated net proceeds of $5,503,000 from the sale of available-for-sale marketable securities during the six months ended June 30, 2011 and, and used $7,159,000 to purchase available-for-sale marketable securities during the six months ended June 30, 2010.

As of June 30, 2011 and December 31, 2010, the amortized cost basis, unrealized holding gains, unrealized holding losses, and aggregate fair value by short-term major security-type investments were as follows (dollars in thousands):

	June 30, 2011							December 31, 2010
			Net							Net
			Unrealized							Unrealized
			Holding							Holding
	Amortized		Gains			Aggregate		Amortized		Gains		Aggregate
	Cost		(Losses)			Fair Value		Cost		(Losses)		Fair Value
U.S. corporate securities:
Commercial paper	$	1,998	$	—		$	1,998	$	1,100	$	—	$	1,100
Corporate notes and bonds		4,225		(4	)		4,221		4,519		4		4,523
		6,223		(4	)		6,219		5,619		4		5,623
U.S. municipal funds		2,088		8			2,096		2,071		3		2,074
U.S. government securities		705		—			705		6,833		2		6,835
	$	9,016	$	4		$	9,020	$	14,523	$	9	$	14,532

Long-term

In June 2011, the Company made an investment in Pure Energy Visions Corporation, which is a shareholder in Pure Energy Solutions, the Company’s supplier of rechargeable batteries, in which the Company received 2,142,858 shares of Pure Energy Visions common stock at a price per share equal to $0.286, and an interest-free convertible secured debenture having a one-year repayment term that converts into an additional 2,142,858 shares of Pure Energy Visions common stock in lieu of repayment either upon the achievement of certain business goals or earlier at iGo’s discretion. The Company did not obtain control of Pure Energy Visions as a result of this investment.

As of June 30, 2011 and December 31, 2010, the amortized cost basis, unrealized holding gains, unrealized holding losses, and aggregate fair value by long-term major security-type investments were as follows (dollars in thousands):

	June 30, 2011						December 31, 2010
			Net						Net
			Unrealized						Unrealized
	Amortized		Holding		Aggregate		Amortized		Holding		Aggregate
	Cost		Gains		Fair Value		Cost		Gains		Fair Value
Canadian corporate securities:
Common stock	$	613	$	44	$	657	$	—	$	—	$	—
Corporate debenture		613		44		657		—		—		—
	$	1,226	$	88	$	1,314	$	—	$	—	$	—

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Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2011

Comprehensive Income (Loss) [Abstract]

Comprehensive Income (Loss)

(9) Comprehensive Income (Loss)

Comprehensive income (loss) for the three and six months ended June 30, 2011 and 2010 includes the following components (dollars in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net income (loss)	$	(1,939	)	$	(400	)	$	(3,578	)	$	369
Other comprehensive income:
Unrealized gain (loss) on available for sale investments		81			14			79			(3	)
Foreign currency translation adjustments		45			(66	)		179			(116	)
Total comprehensive income (loss)		(1,813	)		(452	)		(3,320	)		250

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Product Lines, Concentration of Credit Risk and Significant Customers

6 Months Ended

Jun. 30, 2011

Product Lines, Concentration of Credit Risk and Significant Customers [Abstract]

Product Lines, Concentration of Credit Risk and Significant Customers

(10) Product Lines, Concentration of Credit Risk and Significant Customers

The Company is engaged in the business of selling accessories for computers and mobile electronic devices. The Company has five product lines, consisting of Power, Batteries, Audio, Protection and Other Accessories. The Company’s chief operating decision maker (“CODM”) continues to evaluate revenues and gross profits based on product lines and geographies.

The following tables summarize the Company’s revenues by product line, as well as its revenues by geography (dollars in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Power	$	9,162	$	9,573	$	17,071	$	17,594
Batteries		291		—		437		—
Audio		837		—		1,609		—
Protection		338		—		487		—
Other accessories		203		175		455		322
Total revenues	$	10,831	$	9,748	$	20,059	$	17,916

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
North America (principally United States)	$	7,923	$	8,385	$	14,758	$	14,724
Europe		2,328		867		4,208		2,162
Asia Pacific		580		496		1,093		1,030
	$	10,831	$	9,748	$	20,059	$	17,916

The majority of the Company’s assets are domiciled in the United States.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high credit quality financial institutions and generally limits the amount of credit exposure to the amount of FDIC coverage. However, periodically during the year, the Company maintains cash in financial institutions in excess of the current FDIC insurance coverage limit of $250,000. The Company performs ongoing credit evaluations of its customers’ financial condition but does not typically require collateral to support customer receivables. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

Two customers accounted for 23% and 10% of net sales for the six months ended June 30, 2011. Two customers accounted for 39% and 13% of net sales for the six months ended June 30, 2010.

Two customer’s accounts receivable balance accounted for 22% and 16% of net accounts receivable at June 30, 2011. Two customers’ accounts receivable balances accounted for 33% and 21% of net accounts receivable at June 30, 2010.

Allowance for doubtful accounts was $129,000 and $131,000 at June 30, 2011 and December 31, 2010, respectively. Allowance for sales returns and price protection was $296,000 and $419,000 at June 30, 2011 and December 31, 2010, respectively.

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Net Income (Loss) attributable to iGo, Inc. per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Net Income (Loss) attributable to iGo Inc per Share

(8) Net Income (Loss) per Share

The computation of basic and diluted net income (loss) per share follows (in thousands, except per share amounts):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Basic net income (loss) per share computation:
Numerator:
Net income (loss)	$	(1,939	)	$	(400	)	$	(3,578	)	$	369
Denominator:
Weighted average number of common shares outstanding		33,315			32,750			33,170			32,654
Basic net income (loss) per share:	$	(0.06	)	$	(0.01	)	$	(0.11	)	$	0.01
Diluted net income (loss) per share computation:
Numerator:
Net income (loss)	$	(1,939	)	$	(400	)	$	(3,578	)	$	369
Denominator:
Weighted average number of common shares outstanding		33,315			32,750			33,170			32,654
Effect of dilutive stock options, warrants, and restricted stock units		—			—			—			1,311
		33,315			32,750			33,170			33,695
Diluted net income (loss) per share:	$	(0.06	)	$	(0.01	)	$	(0.11	)	$	0.01
Stock options not included in dilutive loss per share since anti-dilutive		—			15			—			15
Warrants not included in dilutive loss per share since anti-dilutive		5			5			5			5

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Basis of Presentation

6 Months Ended

Jun. 30, 2011

Basis of Presentation [Abstract]

Basis of Presentation

(1) Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of iGo, Inc. and its wholly-owned subsidiaries, Mobility California, Inc., Mobility Idaho, Inc., iGo EMEA Limited, Mobility Texas, Inc., iGo Direct Corporation, Adapt Mobile Limited (“Adapt”) and Aerial7 Industries, Inc. (“Aerial7”) (collectively, “iGo” or the “Company”). All significant intercompany balances and transactions have been eliminated in the accompanying condensed consolidated financial statements.

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles, pursuant to rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying condensed consolidated financial statements include normal recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2010 included in the Company’s Form 10-K, filed with the SEC. The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of results to be expected for the full year or any other period.

The preparation of the condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make a number of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to bad debts, sales returns and price protection, inventories, warranty obligations, and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued amended guidance on the presentation of comprehensive income. The amended guidance eliminates one of the presentation options provided by current U.S. GAAP, that is to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, it gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance will be effective for reporting periods beginning after December 15, 2011 and will be applied retrospectively. The Company is in the process of evaluating the disclosure impact of this guidance.

In May 2011, the FASB issued amended guidance on fair value measurement and related disclosures. The new guidance clarified the concepts applicable for fair value measurement of non-financial assets and requires the disclosure of quantitative information about the unobservable inputs used in a fair value measurement. This guidance will be effective for reporting periods beginning after December 15, 2011, and will be applied prospectively. The Company is in the process of evaluating the financial and disclosure impact of this guidance, and does not anticipate a material impact on its consolidated financial statements as a result of the adoption of this amended guidance.

In December 2010, the FASB issued an update to the existing guidance for goodwill and other intangible assets. The update modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if there are qualitative factors indicating that it is more likely than not that a goodwill impairment exists. The qualitative factors are consistent with the existing guidance which requires goodwill of a reporting unit to be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010, which for the Company is calendar year 2011. The adoption of this guidance did not have a material impact on the Company’s financial condition, results of operations or cash flows for the six months ended June 30, 2011.

In November 2010, the FASB issued an update to its existing guidance on business combinations. This guidance requires a public entity that presents comparative financial statements to present in its pro forma disclosure the revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the prior annual reporting period. In addition, this guidance expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after December 15, 2010, which for the Company is calendar year 2011. The guidance did not have an impact on the Company’s disclosures for the six months ended June 30, 2011.

Other accounting standards and exposure drafts, such as exposure drafts related to revenue recognition, leases, financial instruments, and fair value measurements, that have been issued or proposed by the FASB or other standards setting bodies that do not require adoption until a future date are being evaluated by the Company to determine whether adoption will have a material impact on the Company’s consolidated financial statements.

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Goodwill

6 Months Ended

Jun. 30, 2011

Goodwill and Intangible Assets [Abstract]

Goodwill

(4) Goodwill

Goodwill is as follows (dollars in thousands):

Reported balance at December 31, 2010	$	1,905
Adjustment to Adapt		58
Adjustment to Aerial7		7
Reported balance at June 30, 2011	$	1,970

During the six months ended June 30, 2011, the Company recorded revised estimates of fair value for certain acquired assets and liabilities assumed related to the acquisitions of Adapt and Aerial7 resulting in a net increase to goodwill of $65,000. The Company anticipates the finalization of asset valuations and other post-close adjustments will be completed during the third and fourth quarters of 2011 for Adapt and Aerial7, respectively.

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Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill and Intangible Assets [Abstract]

Intangible Assets

(5) Intangible Assets

Intangible assets consist of the following at June 30, 2011 and December 31, 2010 (dollars in thousands):

			June 30, 2011							December 31, 2010
	Average		Gross					Net		Gross					Net
	Life		Intangible		Accumulated			Intangible		Intangible		Accumulated			Intangible
	(Years)		Assets		Amortization			Assets		Assets		Amortization			Assets
Amortized intangible assets:
Patents and trademarks		3	$	5,117	$	(4,211	)	$	906	$	4,576	$	(3,885	)	$	691
Non-compete agreements		3		170		(49	)		121		170		(19	)		151
Trade names		8		652		(433	)		219		652		(375	)		277
Customer intangibles		5		1,552		(256	)		1,296		1,550		(102	)		1,448
Distribution rights		5		375		(32	)		343		—		—			—
Proprietary process		5		850		(129	)		721		850		(43	)		807
Technology license		10		331		(3	)		328		—		—			—
Total amortizable				9,047		(5,113	)		3,934		7,798		(4,424	)		3,374
Non-amortized intangible assets:
In process research and development				220		—			220		220		—			220
Total intangible assets			$	9,267	$	(5,113	)	$	4,154	$	8,018	$	(4,424	)	$	3,594

Aggregate amortization expense for identifiable intangible assets totaled $310,000 and $689,000 for the three and six months ended June 30, 2011. Aggregate amortization expense for identifiable intangible assets totaled $240,000 and $470,000 for the three and six months ended June 30, 2010.

In February 2011, the Company entered into a marketing, distribution and licensing agreement with PureEnergy Solutions, a manufacturer of rechargeable alkaline batteries. The Company also simultaneously entered into an agreement with Premier Tech Home & Garden to take over its current distribution rights for PureEnergy batteries in Canada. The corresponding value of these distribution rights are reflected in the table above under the caption “Distribution rights.”

In June 2011, the Company made an investment in Pure Energy Visions Corporation, which is a shareholder in Pure Energy Solutions, in which the Company received a license to utilize rechargeable alkaline battery technology. The corresponding value of this license is reflected in the table above under the caption “Technology license.”

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Stock-based Compensation

6 Months Ended

Jun. 30, 2011

Stock-based Compensation [Abstract]

Stock-based Compensation

(6) Stock-based Compensation

In May 2011, the Company’s stockholders approved an amendment to the Omnibus Long-Term Incentive Plan (the “Omnibus Plan”) to increase the number of shares available for grant by 3,000,000, from 2,350,000 to 5,350,000. The Omnibus Plan was also amended to extend its term to March 11, 2024.

Stock-based compensation expense includes compensation expense, recognized over the applicable requisite service periods for share-based awards. As of June 30, 2011, there were no fully-vested outstanding stock options and no non-vested outstanding stock options. Accordingly, there was no unrecognized compensation expense relating to non-vested stock options at June 30, 2011.

The following table summarizes information regarding restricted stock units for the six months ended June 30, 2011:

	2004 Directors Plan					Omnibus Plan					Inducement Grants
				Weighted					Weighted					Weighted
				Average					Average					Average
				Value per					Value per					Value per
	Number			Share		Number			Share		Number			Share
Outstanding, December 31, 2010		72,276		$	1.42		808,229		$	1.90		1,425,000		$	1.91
Granted		—			—		690,250		$	3.00		—			—
Canceled		—			—		(7,500	)	$	2.82		—			—
Released to common stock		(72,276	)		1.42		(296,435	)	$	2.14		(171,126	)		2.13
Released for settlement of taxes		—			—		(109,932	)	$	2.22		(78,874	)		2.13
Outstanding, June 30, 2011		—		$	—		1,084,612		$	2.50		1,175,000		$	1.87

For the three and six months ended June 30, 2011, the Company recorded in general and administrative expense pre-tax charges of $564,000 and $986,000, respectively, associated with the expensing of restricted stock unit (“RSU”) awards activity. For the three and six months ended June 30, 2010, the Company recorded in general and administrative expense pre-tax charges of $351,000 and $618,000, respectively, associated with the expensing of restricted stock unit awards activity As of June 30, 2011, there was $3,933,000 of total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of two years.

As of June 30, 2011, all outstanding restricted stock units were non-vested.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income (loss)	$ (3,578)	$ 369
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Provision for doubtful accounts and sales returns and credits	426	124
Depreciation and amortization	900	740
Amortization of deferred compensation	986	618
Gain on sale of business		(1,714)
Changes in operating assets and liabilities:
Accounts receivable	1,069	(75)
Inventories	(3,976)	(255)
Prepaid expenses and other assets	(974)	(244)
Accounts payable	555	1,486
Accrued expenses and other current liabilities	(1,940)	709
Net cash (used in) provided by operating activities	(6,532)	1,758
Cash flows from investing activities:
Purchase of property and equipment	(184)	(149)
Purchase of intangibles	(706)
Sale (purchase) of short-term investments, net	5,503	(7,159)
Purchase of long-term investments	(1,226)
Net cash provided by (used in) investing activities	3,387	(7,308)
Cash flows from financing activities:
Net cash provided by financing activities	0	0
Effects of exchange rate changes on cash and cash equivalents	177	(116)
Net decrease in cash and cash equivalents	(2,968)	(5,666)
Cash and cash equivalents, beginning of period	9,942	19,775
Cash and cash equivalents, end of period	$ 6,974	$ 14,109

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Fair Value Measurement

6 Months Ended

Jun. 30, 2011

Fair Value Measurement [Abstract]

Fair Value Measurement

(2) Fair Value Measurement

As of June 30, 2011, the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis are comprised of overnight money market funds and investments in marketable securities.

The Company invests excess cash from its operating cash accounts in overnight money market funds and reflects these amounts within cash and cash equivalents on the condensed consolidated balance sheet at a net value of 1:1 for each dollar invested.

At June 30, 2011 and December 31, 2010, investments in marketable securities totaling $9,020,000 and $14,532,000, respectively, are classified as short-term investments on the condensed consolidated balance sheets. These investments are considered available-for-sale securities and are reported at fair value based on third-party broker statements, which qualifies as level 2 in the fair value hierarchy. At June 30, 2011, investments in marketable securities totaling $1,314,000 are classified as long-term investments on the condensed consolidated balance sheet. These investments are considered available-for-sale securities and are reported at fair value based on a quoted market price, which qualifies as level 1 in the fair value hierarchy. The unrealized gains and losses on available-for-sale securities are recorded in accumulated other comprehensive income. Realized gains and losses are included in interest income, net.

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Contingencies

6 Months Ended

Jun. 30, 2011

Contingencies [Abstract]

Contingencies

(11) Contingencies

The Company procures its products primarily from supply sources based in Asia. Typically, the Company places purchase orders for completed products and takes ownership of the finished inventory upon completion and delivery from its supplier. Occasionally, the Company presents its suppliers with ‘Letters of Authorization’ for the suppliers to procure long-lead raw components to be used in the manufacture of the Company’s products. These Letters of Authorization indicate the Company’s commitment to utilize the long-lead raw components in production. As of June 30, 2007, based on a change in strategic direction, the Company determined it would not procure certain products for which it had outstanding Letters of Authorization with suppliers. The Company believes it is probable that it will be required to pay suppliers for certain Letter of Authorization commitments and has already partially settled some of these obligations. At June 30, 2011 and December 31, 2010, the Company had estimated, and recorded, a remaining liability for this contingency in the amount of $175,000 and $160,000, respectively.

From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business. The Company is not currently a party to any litigation that the Company believes, if determined adversely to it, would have a material adverse effect on its financial condition, results of operations, or cash flows.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 6,974	$ 9,942
Short-term investments	9,020	14,532
Accounts receivable, net	7,126	8,620
Inventories	14,283	10,307
Prepaid expenses and other current assets	828	460
Total current assets	38,231	43,861
Property and equipment, net	625	654
Goodwill	1,970	1,905
Intangible assets, net	4,154	3,594
Long-term investments	1,314	0
Other assets	159	159
Total assets	46,453	50,173
Liabilities:
Accounts payable	5,221	4,666
Accrued expenses and other current liabilities	1,051	1,371
Deferred revenue	706	1,838
Total liabilities	6,978	7,875
Equity:
Common stock, $.01 par value; authorized 90,000,000 shares; 33,430,781 and 32,893,892 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively	334	329
Additional paid-in capital	172,733	172,241
Accumulated deficit	(133,959)	(130,381)
Accumulated other comprehensive income	367	109
Total equity	39,475	42,298
Total liabilities and equity	$ 46,453	$ 50,173